1、!#$%#$#&$()*#+%,-(%#,.#+%,+%(/$%0#$*%(12&/2%$(,&,*(1$&#+%,21/4#$)#/15),&,*0#4,&2/(,)4#.,124#,)#(6+%,-()*#1%,+#+%.,%6$)17FOR THE YEAR ENDED 31 DECEMBER 2015Plant Health Care plc1Annual Report and Accounts 2015Plant Health Care is a leading provider of proprietary agricultural biological products a
2、ndtechnology solutions focused on improving crop performance.The Companys ordinaryshares have been quoted on the AIM market of the London Stock Exchange sinceJuly 2004(ticker symbol:PHC).ContentsDirectors and advisers2Chairmans letter3Strategic report6Directors14Board committees16Corporate governanc
3、e17Remuneration Committee report20Report of the directors27Statement of directors responsibilities29Independent auditors report30Consolidated statement of comprehensive income32Consolidated statement of fnancial position33Consolidated statement of changes in equity34Consolidated statement of cash fo
4、ws35Notes forming part of the Group fnancial statements36Company balance sheet72Company statement of changes in equity73Notes forming part of the Company fnancial statements7418966 Plant Health Care AR:Layout 115/04/201616:37Page 1DirectorsDr.Christopher G.J.Richards Executive ChairmanPaul M.Schmidt
5、Chief executiveDr.Richard H.WebbExecutive directorMichael J.HigginsSenior independent directorJames L.Ede-GolightlyNon-executive directorWilliam M.LewisNon-executive directorSecretaryAndrew C.Wood FCISRegistered offce48 Chancery LaneLondon WC2A 1JFCompany number05116780Broker and nominated adviserLi
6、berum Capital LimitedRopemaker Place25 Ropemaker StreetLondon EC2Y 9LYAuditorBDO LLP55 Baker StreetLondon W1U 7EUCompany solicitorMichelmores LLP48 Chancery LaneLondon WC2A 1JFRegistrarNeville Registrars LimitedNeville House18 Laurel LaneHalesowenWest Midlands B63 3DA2Directors and advisersPlant Hea
7、lth Care plcAnnual Report and Accounts 2015In this document,references to“the Company”are to Plant Health Care plc.References to“Plant HealthCare”,“the Group”,“we”or“our”are to Plant Health Care plc and its subsidiaries and lines of business,orany of them as the context may require.The Plant Health
8、Care name and logo,Myconate,ProAct,and N-Hibitand other names and marks appearing herein and on company literature are trade marks or trade names of PlantHealth Care.All other third party trade mark rights are acknowledged.18966 Plant Health Care AR:Layout 115/04/201616:37Page 2OverviewPlant Health
9、Care is a leading provider of proprietary agricultural biological products and technology solutionsfocused on improving crop performance.This has been a year of strong commercial sales growth in a diffcult market as well as accelerated progress inthe Companys innovation.We report here separately the
10、 two areas of focus for the business:1.NewTechnology(renamed from Bio-stimulant Discovery and Development);and 2.Commercial.We are noworganised in these two lines of business and report our Commercial business in three geographic segments Americas,Mexico and Rest of World.We report our New Technolog
11、y business in a single segment.We have also included this year a much more detailed explanation in the Strategic report of our products,theareas we are focusing on in New Technology and also our industry.We hope this will help our shareholdersbetter understand the exciting opportunities available to
12、 us.New TechnologyNew Technology is focused on the discovery and early development of novel proprietary biological solutionsusing the Groups PREtec platform(PREtec signifes Plant Response Elicitor technology).Our Group continuesto invent and seek patent protection for new technologies developed usin
13、g its PREtec platform;these newtechnologies will mainly be developed into fnal products in partnership with major industry players,who willbe responsible for commercialising them,while we plan to preserve the ability to develop and commercialisethese peptides in specialty crops ourselves.New Technol
14、ogy made remarkable progress during the year,under the leadership of our Chief Science Offcer(“CSO”),Dr.Zhongmin Wei.Our frst family of PREtec peptides,Innatus 3G,was presented to six potentialmajor industry partners in the latter part of 2014.We expect that Innatus 3G will permit the development of
15、customisable products that will be compatible with agrochemicals and complementary to existing agriculturalpractices.During 2015,we were delighted to report that four of those six companies signed agreements toevaluate the technology.We are now intensively engaged with these partners,who are showing
16、 increasingexcitement about the potential of the Innatus 3G family.In parallel,we are presenting our evaluation partners with further data on products derived from Innatus 3G.We completed our third year of feld trials in corn with Innatus 3G.This included one peptide variant with threeyears of feld
17、trial data delivering an average yield increase of 9.6 bushels per acre when applied as a seedtreatment compared with industry standard treatments alone,with a win rate of 79%,with data from 19 of20 sites analysed to date.This investment in our own data is helping to stimulate our partners to invest
18、igatethe potential of Innatus 3G.Our laboratory in Seattle has also made great strides in revealing a pipeline of PREtec technology beyondInnatus 3G.During 2016,further trial data will be generated and assessed.Assuming positive results,duringthe 2017 to 2018 time period,we intend to proceed with ou
19、t-licensing Innatus 3G on a crop and geographicbasis.In addition to Innatus 3G,we have identifed other peptide families using PREtec with very promisingearly results that we intend to continue to evaluate internally,aiming to advance additional peptide familiesto the advanced development stage over
20、the next several years.Chairmans letterPlant Health Care plc3Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 3Refecting the speed of progress in New Technology,we have increased substantially our investment in researchand development(“R&D”).In 2015,we invested$4
21、.1 million in R&D,an increase of 101%over 2014.The New Technology team in Seattle now numbers 14 and we moved into larger,customised laboratorypremises during the year.We have devoted considerable resources to our intellectual property and are confdentthat we are building effective protection around
22、 our technology.CommercialOur Commercial business sells our proprietary products worldwide through distributors and distributescomplementary third-party products in Mexico.Commercial continues to expand the registration of commercialproducts and management of channels to market.Commercial is current
23、ly focused on driving sales of Harpinand Myconate around the world,both directly and with value chain partners.We believe that our achievementof a product registration in Brazil will result in traction for Harpin in the largest agricultural market in the worldfrom 2016 onwards.The Commercial team ha
24、s been strengthened during 2015,to drive further growth as wecontinue to expand our geographical focus in key markets by identifying capable distribution partners to extendour reach.Overall total sales grew by 9%(15%in constant currency)despite headwinds in the agricultural market.Salesin the Americ
25、as were strong and grew by 24%.Mexico represented some 47%of the Groups sales.Salesdenominated in the Mexican peso increased by 7.2 million but,due to the continued devaluation of the peso,sales in US dollars showed a slight decrease.Our proprietary products now represent 60%of our sales,whichhas he
26、lped to increase gross margin further to 62%.Careful control of costs and of working capital ensuredthat we fnished the year with a net loss and cash balances broadly in line with expectations.Strong momentum is now building in the sales of Harpin-based products,which experienced a compoundannual gr
27、owth rate(“CAGR”)of 35%from 2013 to 2015,excluding up-front payments,as shown in the graphbelow.This steady growth is now under-pinned by a growing network of strong distribution partners,committed to the market development efforts which are required for sustained sales growth of Harpin products.Har
28、pin revenue$4,500,000$4,000,000$3,500,000$3,000,000$2,500,000$2,000,000$1,500,000$1,000,000$500,000CAGR:35%201320142015$2,120,000$3,165,000$3,863,000Chairmans lettercontinuedPlant Health Care plc4Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 4Board changesGive
29、n the exciting expectations for the Group,the Board requested me to take a more active role in developingstrategy and in investor relations.I,therefore,became Executive Chairman with effect from 1 April 2015.My role is to support Paul Schmidt and the management team,who are responsible for all aspec
30、tsof implementation.In January 2015,Dr.Richard H.Webb,formerly a non-executive director,became an Executive Director.Dr.Webb is responsible for supporting our CSO,Dr.Zhongmin Wei,as we continue to expand our investmentin our New Technology programme.James Ede-Golightly joined the Audit Committee on
31、16 January 2015 and,in conjunction with taking on therole of Executive Director,Dr.Webb stepped down from the Audit Committee after last years AGM.With effect from 1 April 2015,William(“Bill”)M.Lewis joined the Company as a non-executive director.The relevant experience and background of each member
32、 of the Board is set out on pages 14 and 15.OutlookAgriculture markets in general are much less buoyant than in previous years,driven by lower commodity prices.However,we believe that growers in key markets will continue to adopt agricultural biological products whichincrease their productivity.Base
33、d on various reports,we believe the global biologicals market in 2015 wasover$2.5 billion,with an expected compound annual growth rate of approximately 10%from 2015 to 2020.We are optimistic with respect to the growth prospects for Harpin.The positive response of our evaluationpartners to early resu
34、lts with Innatus 3G is an enormously encouraging signal of the potential of PREtec.Plant Health Care is now well established on the new direction which Paul Schmidt and I set out for the Groupin 2013.The progress in advancing our PREtec platform and commercialising our proprietary products during201
35、5 was strong,and we confdently expect further progress during 2016 as we build upon our position as aleader in the agricultural biologicals marketplace.In closing,I would like to thank the entire Plant Health Care team for all their hard work during the year.Strong results come from great people,wor
36、king towards shared goals.Paul Schmidt has built an impressiveteam,in which I have the greatest confdence.Dr.Christopher RichardsExecutive Chairman8 April 2016Chairmans lettercontinuedPlant Health Care plc5Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 5We are
37、a leading provider of proprietary agricultural biological products and technology solutions focused onimproving crop performance by activating a growth response and bolstering plant defence mechanisms againstboth abiotic stresses,such as drought and extreme temperatures,and biotic stresses,such as w
38、eedencroachment or pest infestation.We are now organised in two lines of business:New Technologyand Commercial.Our New Technology business focuses on the advancement of our proprietary Plant Response Elicitortechnology platform,or PREtec,to develop and provide more rapid commercialisation of small s
39、trands ofamino acids,or peptides,which we intend to out-license.We are currently focused on commercialising thistechnology by partnering with leading agriculture companies to accelerate its adoption in key geographic andcrop markets.PREtec enables the custom design and creation of peptides to achiev
40、e targeted responses inspecifc crops.These include improving a plants ability to grow effciently,increasing its yield,bolstering itsresponses to stresses such as drought and enhancing its resistance to external factors,such as diseases andcertain pests in both row and specialty crops.Currently,four
41、of the six largest global agriculture companiesare evaluating Innatus 3G,our frst peptide family developed from PREtec.We report our New Technologybusiness in a single segment.Our Commercial business focuses on selling proprietary biological products that are applied to soil,seeds orplants to improv
42、e the plants health and yield by enhancing its physiological processes.Our proprietaryproducts are primarily categorised as biofertilisers and biostimulants,which we believe are the most rapidlygrowing segments in the biological industry.Our current product portfolio is mainly based on our proprieta
43、ryHarpin technology,which is proven to trigger growth and self-defence mechanisms within plants to drivebetter performance.Through feld trials we have commissioned or through those conducted by our distributors,we have demonstrated results in a number of crops:our second generation Harpin products h
44、ave createdyield increases of approximately 3%to 5%in US corn and soybeans while improving plant growth,resistanceto abiotic stress and protection against certain pathogens.Our products are complementary to and compatiblewith existing crop protection products and methods,promoting further adoption.O
45、ur Commercial business sells our proprietary products worldwide through distributors(which accounted for60%of our revenues in 2015)and distributes complementary third-party products(which accounted for 40%of our revenues in 2015)in Mexico.Our proprietary products have treated millions of acres to da
46、te acrossmultiple signifcant,global agricultural markets,including the United States of America(“United States”or“US”),Mexico and Europe.We report our Commercial business in three geographic segments Americas(which accounted for 35%of our revenues in 2015),Mexico(which accounted for 47%of our revenu
47、es in2015)and Rest of World(which accounted for 18%of our revenues in 2015).The Board believes that our innovative and value-added line of biological products helps satisfy the growingglobal demand for effcient,effective and environmentally-responsible products to increase crop yields andoverall pla
48、nt health.We have screened,identifed and developed our novel biological products and technologiesand validated their effcacy in improving plant health leading to higher yields.Through our signifcantinvestment in research and development,we have a scientifc-based understanding of our products mode of
49、action(the functional change that occurs at the cellular level),which enables us to design and produce adiverse range of protein-based biologicals to provide signifcant value for growers.The chart below illustratesour technology progression.6Strategic reportPlant Health Care plcAnnual Report and Acc
50、ounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 6Our products and technologiesHarpinOur Harpin products are well established in both the seed and foliar treatment markets and can be used totreat over 40 different types of crops.We currently focus on products that treat row crops as
51、well as high-valuespecialty crops.We have three principal Harpin products:N-Hibit,a seed treatment application for rowcrops;ProAct,a foliar application for row crops;and Employ,a foliar application for specialty crops.Each ofthese products can be applied in conjunction with conventional agrochemical
52、s or seed treatments.Duringthe year ended 31 December 2015,we derived 45%of our revenues from our Harpin products,for whichwe have a number of current patents that expire between 2017 and 2027.MyconateOur Myconate product is a soil treatment that increases colonisation of roots by over 50%,aiding ea
53、rly-stageplant growth and important nutrient access.This essentially provides the plant with a larger root system sothat it can grow under conditions that normally would inhibit growth,such as drought,nutrient defciency,chemical residues and soil salinity.Myconate is available in powder and liquid f
54、orms and can be appliedeffectively as a seed coating,an in-furrow application or mixed with fertiliser.During the year ended31 December 2015,we derived 6%of our revenues from our Myconate products,for which we have a numberof current patents that expire between 2018 and 2031.Technology progressionTe
55、chnology HarpinPREtecGeneration1G,2G3G Biologicals4G GeneticsProducts1G:Natural protein 2G:Recombinant protein?Multiple families of synthetic peptides?First family(Innatus 3G)-inadvanced development phase?Further families in early development phase?Genetic traits-in proof of concept phase?Further di
56、scovery-in progressOverview?Large proteins?Stimulate plant growthand defense?Short synthetic peptides?Customisable to stimulate?Compatible with standard agricultural inputs?DNA inserted into the plants genome to express the peptides?Modulates plant physiology ActiveSite4 ActiveSites1G2G(up to 10time
57、s more activethan 1G)CommercialSales and licensesProof of conceptDiscoveryEvaluation phase ChromosomeGeneProductsGenerationechnology2G:Rec1G:NaT Technology Tech1G,2Gcombinant proteinatural proteinHarpinhnology progress3G Biologicals advanced development pInnatus 3G)-inFirst family(?peptidesMultiple
58、families of synthetic?sion4G lsFurther discov?concept phase Genetic traits?phase-inhetictecPRE Geneticsvery-in progressse-in proof of OverviewandStim?Larg?defensemulate plant growthge proteinsptimes more active2G(up to 101Gagricultural inputs Compatible with standard?Customisable to stimulate?Short
59、synthetic peptides?development phaseFurther families in early?advanced development pModulates plant physiology?genome to exinsertedA ADN?rdteyphaseant physiology xpress the peptidess d into the plantSitesvethan 1G)CommercialEvaluation phase aseProof oChromosomeof conceptGeneS Sales and licensesDis s
60、coveryStrategic reportcontinuedPlant Health Care plc7Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 7PREtecOur PREtec platform identifes families of peptides that provide crop treatment options for growers that arecomplementary to existing agricultural technolo
61、gies and practices.Our PREtec peptides may be designed tostimulate specifc desired responses in the plant such as improved yield,vigour and resistance to biotic andabiotic stresses.Through our PREtec platform,we have screened hundreds of peptide variants and have engagedin greenhouse and feld testin
62、g for dozens of promising novel peptides.As shown in the chart below,wecurrently have three 3G peptide families in various development phases,and 4G platforms are in the earlystages of development.We presented our frst family of novel peptides,Innatus 3G,to six major participantsin the agriculture i
63、ndustry and four of these companies are currently evaluating it internally.We expect thatour 3G peptide families will be customised and combined with standard crop protection applications throughboth seed treatment and foliar applications to improve plant health.We are in the early stages of develop
64、mentof our 4G peptide platforms,the frst of which we anticipate enabling the incorporation of peptides into aplants genome so that the plant will be able to express these peptides internally.Our growth strategyOur future growth will be achieved by focusing on the following key areas:Increasing sales
65、 of existing commercial products.We intend to drive near-term revenue growth in ourCommercial business to more fully address our opportunities in the agricultural market.We areincreasing our focus on specialty crop markets(such as fruits and vegetables)to complement theposition we have gained in row
66、 crop markets.We plan to continue to grow our geographical expansionin key markets by identifying capable distribution partners to extend our reach.Expanding market for existing products through additional product registrations.We intend to continueto build upon our strong portfolio of registered pr
67、oducts by pursuing additional market approvals forHarpin and Myconate.Harpin is approved for use in 13 countries,and Myconate is approved foruse in 11 countries.We have applied for further registrations to expand our market access to countriessuch as Germany,Italy,Argentina and Canada.Continuing to
68、execute on out-licensing business model with Innatus 3G.Our development progressover the past two years positions us to successfully bring Innatus 3G to market through a capital-effcient out-licensing model.We have entered into agreements with four major players in the agricultureindustry to evaluat
69、e Innatus 3G.GeneticsBiologicalsPREtec platformCompleteIn progressInnatus 3G family2nd 3G family3rd 3G family1st 4G platform2nd 4G platformPhase 1Phase 2Phase 3Phase 4Phase 5Phase 6DiscoveryProof of conceptEarlydevelopmentAdvanceddevelopmentPre-launchCommercial8Strategic reportcontinuedPlant Health
70、Care plcAnnual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 8Accelerating PREtec peptide technologies.Through our targeted development work,we have identifedseveral additional families of PREtec peptides.We are aiming to introduce up to three more families ofPREtec
71、peptides within the next two to three years.Pursuing strategic collaborations and acquisitions.We believe we are well positioned for strategiccollaborations or acquisitions in the agricultural biological industry as a result of our science-basedtechnology approach,our access to growers and distribut
72、ors through our existing commercial platformand our management teams extensive experience.Our industryThe global agriculture industry is facing increasing demand for products and technologies that effectively andcost-effciently improve crop yield and quality.This increasing demand is being primarily
73、 driven by a risingglobal population and an expanding middle class in certain regions.The Food and Agriculture Organizationof the United Nations estimates that the global population will reach 7.8 billion by 2020,an increase of 5.6%from 7.3 billion today,and arable land per capita has decreased from
74、 0.41 hectares per person in 1962 to 0.20hectares per person in 2012.The Organisation for Economic Co-operation and Development estimates thatthe global middle class population was 1.8 billion people in 2009 and projects it will grow to 3.2 billion peopleby 2020 and reach 4.9 billion people by 2030.
75、To meet these demands,agrochemical,agricultural biotechnology and other agriculture companies continuallyseek to offer new solutions for improving the health and vitality of crops worldwide.For the past severaldecades,these solutions have come primarily through advances in conventional plant breedin
76、g,screening orgenetic modifcation of seeds to produce crops with desired traits,fertilisers to promote plant growth andherbicides and insecticides,nematicides and fungicides to reduce or eliminate external threats.More recently,as agrochemical innovation and usage has started to plateau,the developm
77、ent of biological solutions hasstarted to play an increasing role in meeting growers needs.As the effectiveness of biological solutions hasapproached and,in some cases,surpassed more conventional solutions,biologicals will play an increasinglyimportant role in providing a solution to crop yield and
78、quality demands from growers.Biological products offer multiple benefts to the agriculture industry:Protection from abiotic stress.Whereas conventional crop protection products typically focus on bioticstresses,biological products generally improve a plants tolerance to both biotic and abiotic stres
79、ses.Integrated crop management.Since biological products can be complementary to existing agrochemicalproducts and genetically modifed seeds,they enable growers to improve the return on their investmentwhile pursuing an integrated approach to crop management.Reduced time and cost to market.In genera
80、l,biological products take less time to reach the market thanagrochemical products or genetically modifed seeds due to reduced regulatory burdens.Furthermore,due to complex and lengthy regulatory pathways,it is estimated that biological products cost far lessto develop than conventional chemical pes
81、ticides or genetically modifed traits.Safe and sustainable.Biological products are generally safer for workers to handle and generally pose areduced hazard to benefcial organisms on or near the treated plants.Strategic reportcontinuedPlant Health Care plc9Annual Report and Accounts 201518966 Plant H
82、ealth Care AR:Layout 115/04/201616:37Page 9Biological products and technologies represent a highly innovative and rapidly growing sector of the agricultureindustry.Based on various reports,we believe the global biologicals market in 2015 was over$2.5 billion,with an expected compound annual growth r
83、ate of approximately 10%from 2015 to 2020.This is asubstantially higher rate than the expected compound annual growth rate for global agrochemicals ofapproximately 3 to 5%from 2015 to 2020.Adoption rates for agricultural biologicals are expected to be highestin the United States,Europe and South Ame
84、rica,where growers are typically further ahead of those indeveloping countries with respect to agricultural innovation.Financial summaryA summary of the fnancial results for the twelve months to 31 December 2015,with comparatives for theprevious fnancial year,is set out below:20152014$000$000Revenue
85、7,5086,880Gross proft4,6833,501Operating loss(7,776)(6,077)Finance income(net)93116Net loss for the year(7,720)(6,130)Revenues in 2015 increased by 9%to$7.5 million(2014:$6.9 million)as a result of a$1.5 million increase inHarpin product sales to two customers,partially offset by decreased Harpin pr
86、oduct sales of$1.0 million to asingle customer.The gross margin increased to 62%of sales in 2015,compared to 51%in 2014.The increaseisattributabletolowerunitcostsduetomorefavourablemanufacturingcostsofourproprietaryHarpinproducts.Operating expenses increased to$12.5 million from$9.6 million.Expendit
87、ure within R&D increased$2.1 million to$4.1 million in 2015(2014:$2.0 million).The increase was due to the hiring of additionalresearch and development staff,higher patent expenses and increased contract research costs.The Groupexpects that our R&D costs will further increase as we continue to inves
88、t in the development of ourPREtec platform.In addition,we have set out in Note 9 the separate category of expenditure relating to Business Development,which increased slightly to$1.2 million in 2015(2014:$1.0 million).This relates to expenditures for feldtrials with existing and potential customers
89、and other costs relating to customer support,market research andthe negotiation of commercial agreements.Unallocated corporate expenses increased to$2.0 million(2014:$1.4 million).Cash and investments at 31 December 2015 amount to$8.4 million(2014:$16.7 million).Key performance indicators(“KPIs”)The
90、 Group uses a range of performance measures to monitor and manage the business effectively.These areboth fnancial and non-fnancial.The most signifcant relate to Group fnancial performance and to the Groupsprogress in driving the two pillars of its strategy.10Strategic reportcontinuedPlant Health Car
91、e plcAnnual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 10The KPIs for fnancial performance of the Commercial area and for the Group as a whole include revenue,gross proft and margin,and operating proft/loss.These KPIs indicate the volume of work the Group hasunder
92、taken,as well as the effciency with which this work has been delivered.The KPIs for fnancial performance for the year ended 31 December 2015,with comparatives for the year ended31 December 2014,are set out below;20152014Revenue($000)7,5086,880Gross proft($000)4,6833,501Gross proft margin(%)62.450.9O
93、perating loss($000)(7,776)(6,077)In addition,an important KPI is the increase in revenue achieved from the sale of our proprietary products.These increases are shown below,separating out the product revenue from the receipt of license/milestonepayments and other one-off payments,which are less predi
94、ctable and tend to distort the product sales growth.Proprietary sales(excluding licensing revenue)20152014$000$000Americas2,2781,821Mexico643563Rest of World1,3641,240Total4,2853,624The KPIs for non-fnancial performance relate to the Groups technologies and include the number and natureof contracts
95、realised with partners,and progress along the mutually agreed paths to commercial launchof products.The Board continues to monitor the progress of its R&D activities and expenditures.As each research projectadvances,specifc progress is reported to the Board and costs against budget are monitored.We
96、anticipaterefning the KPIs for R&D as each project develops.In addition,the Business Development activities of the Group are assessed against our success in developingspecifc evaluation and commercial arrangements with third parties for the exploitation of our proprietaryproducts.Principal risks and
97、 uncertaintiesOur business is subject to a number of potential risks and uncertainties,including those listed below.The occurrence of any of these risks may materially and adversely affect our business,fnancial condition,results of operations and future prospects.We manage and mitigate these risks b
98、y executing on the strategydescribed above.Strategic reportcontinuedPlant Health Care plc11Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 11Financial and liquidity riskWe have a history of losses since inception,anticipate continuing to incur losses in the futu
99、re and maynot achieve or maintain proftability.We expect to require additional fnancing in the future and may be unable to obtain such fnancing onfavourable terms or at all,which could force us to delay,reduce or eliminate our research,developmentor commercial activities.Technology and commercialisa
100、tion riskOur PREtec development and out-licensing strategy is in an early stage and may not be successful.We are subject to risks relating to product concentration due to the fact that we derive substantiallyall of our revenues from our Harpin and Myconate product lines and from the sale of third-pa
101、rty products.We may be unable to establish or maintain successful relationships with third-party distributors andretailers,which could materially and adversely affect our sales.We have a limited number of sales and marketing personnel and will need to expand our sales andmarketing capabilities to gr
102、ow revenues from our commercial products.We may be unable to obtain adequate protection for the intellectual property covering our newtechnology and product candidates or develop and commercialise these product candidates withoutinfringing on the intellectual property rights of third parties.Regulat
103、ory and legal riskIf we are unable to obtain regulatory approvals,or to comply with ongoing and changing regulatoryrequirements,it could delay or prevent sales of our commercial products or impede the developmentof potential products.If we use PREtec in trait development,our technologies and product
104、 candidates will face more stringentregulatory regimes.If we are unable to comply with regulations applicable to our facilities and procedures and those of ourthird-party manufacturers,our research and development or manufacturing activities could be delayed,limited or prevented.Credit riskThe major
105、ity of our net sales are credit sales that are made primarily to customers whose ability to payis dependent,in part,upon the economic strength of the industry and geographic areas in which theyoperate,and the failure to collect or timely collect monies owed from customers could materially andadverse
106、ly affect our fnancial condition.PersonnelOur future growth and ability to compete depend on retaining our key personnel and recruitingadditional qualifed personnel.12Strategic reportcontinuedPlant Health Care plcAnnual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 1
107、2Financial instrumentsThe Group uses various fnancial instruments,including equity,cash,short-term investments of investmentgrade notes and bonds,and items such as trade receivables and trade payables that arise directly fromits operations.Information on the risks associated with the Groups involvem
108、ent in fnancial instruments is given in Note 19to the fnancial statements.On behalf of the BoardPaul SchmidtChief Executive8 April 2016Strategic reportcontinuedPlant Health Care plc13Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 13Dr.Christopher G.J.Richards(E
109、xecutive Chairman)Dr.Richards joined the Company as non-executiveChairman in August 2012.He became ExecutiveChairman in April 2015 to take on a more active rolein investor relations and in developing strategy,particularlythefocusonNewTechnology.Dr.Richards spent 20 years at Syngenta andits predecess
110、or companies in various strategicmanagement positions in South America,Europe andAsia.In November 2003,he was appointed COOof Arysta LifeScience,and he served as CEO from2004 until 2010,leading Arysta LifeSciencestransformation into a global agrochemical companywith sales above$1.6 billion.He also s
111、erved as adirector of Arysta LifeScience from 2003 to 2015.He serves on the board of directors of Dechra plc,aninternational specialist veterinary pharmaceuticalsbusiness,Cibus Global Ltd.,a precision gene editingcompany focused on non-transgenic crop breeding,Origin Enterprises plc,a service provid
112、er to farmersfor food production solutions,and Nanoco Groupplc,a technology company carrying out research,development and commercialisation of productsbased on heavy-metal free quantum dots.Paul M.Schmidt(Chief Executive Offcer)Paul Schmidt has served as Chief Executive Offcerand a member of the Boa
113、rd since April 2013.Mr.Schmidt has extensive operational experience inthe agriculture industry,having served most recentlyas President of Merck/EMD Crop Bioscience,a leadingdeveloper of natural plant health products,where heled a turnaround that resulted in substantiallyincreased sales and proft.In
114、February 2011,heoversaw the sale of the business to Novozymes for$275 million.Mr.Schmidt served in senior roles inthe United States,Germany and Canada during 25years with Bayer CropScience and its predecessorcompanies,most recently as Vice President andGlobal Head of New Business Ventures where he h
115、adresponsibilityfordevelopingnewbusinessopportunities in the areas of nutrition,health andbiomaterials.Mr.Schmidt graduated from theUniversity of Saskatchewan with a BSA in Agronomyin 1980.He is a member of the board of directors ofAlberta Innovates BioSolutions(Province of AlbertaCorporation),a res
116、earch agency funded by theGovernment of Alberta that works to grow prosperityin Albertas agriculture,food and forestry sectors.Michael J.Higgins(Senior independent director)Michael Higgins joined the Company in May 2013 assenior independent director and Chair of the AuditCommittee.He also serves as
117、a member of theRemuneration Committee.He currently serves asnon-executivechairmanofEbiquityplc,anindependent marketing analytics company,a non-executive director of Arria NLG plc,a softwaredevelopment business,a non-executive director ofProgility plc,a project management services group,and chairman
118、of the Quoted Companies Alliance,anon-proft organisation dedicated to helping small tomid-sized publicly traded companies grow.He is alsoa member of the Panel on Takeovers and Mergers asthe appointee of the Quoted Companies Alliance.Mr.Higgins was a partner at KPMG for 10 years andsubsequently serve
119、d as a senior adviser at KPMG.Prior to KPMG,Mr.Higgins was a director atCharterhouse Bank,worked at Saudi InternationalBank and qualifed as an accountant with PriceWaterhouse(now PricewaterhouseCoopers).DirectorsPlant Health Care plc14Annual Report and Accounts 201518966 Plant Health Care AR:Layout
120、115/04/201616:37Page 14James L.Ede-Golightly(Non-executive director)James Ede-Golightly joined the Company as a non-executive director in June 2013.He is Chair of theRemuneration Committee and a member of the AuditCommittee.He currently serves as chairman of EastBalkan Properties plc,an investment c
121、ompanyfocused on commercial property in the Balkan region,chairman of Quoram Plc,an investment company,chairman of Cronin Group plc,an AIM-listedtechnology company,as a director of ORA Limited(Jersey),a private equity frm,and as non-executivedirector of Gulfsands Petroleum,an independent oiland gas
122、exploration and production company.In2006,he co-founded ORA Capital Partners,and hepreviously served as an analyst at Merrill LynchInvestment Managers and Commerzbank.He is aCFA Charterholder and Chartered Director.Dr.Richard H.Webb(Executive director)Dr.Webb joined the Company in September 2013 asa
123、 non-executive director.In January 2015,he wasappointed an executive director,responsible forsupporting the Chief Science Offcer,Dr.ZhongminWei,as the Company continues to expand itsresearch and development capability.He waspreviously engaged by the Company as a consultant,contracted through StepOut
124、 Ltd.,a consultancybusiness he founded in 1995.In this capacity,between 2012 and 2014,he was instrumental in thedevelopment of the Companys new businessstrategy and its current New Technology programme.He previously held various positions at ImperialChemicalIndustriesanditsspinoutZenecaAgrochemicals
125、,includingresponsibilitiesformanaging laboratory discovery and feld developmentprogrammes for its public health pesticide business.His doctorate,in pest biology,was from the LondonSchool of Hygiene&Tropical Medicine.William M.Lewis(Non-executive director)William Lewis joined the Company as a non-exe
126、cutive director in April 2015.Since June 2014,Mr.Lewis has served as President and CEO ofSummitAgroUSA,LLC,ajointventureagrochemicalsbusinessbetweenSumitomoCorporation and ISK Biosciences.He previously heldsenior roles within Arysta LifeScience,Syngenta CropProtection and Zeneca/ICI.Directorscontinu
127、edPlant Health Care plc15Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 15The principal standing committees appointed by theBoard are as follows:Audit CommitteeThe Audit Committee is chaired by Michael Higgins.In January 2015,James Ede-Golightly was added as am
128、ember of the Committee.Subsequently,at the endof the 2015 AGM,Dr.Webb,who had taken onexecutive responsibilities in January 2015,steppeddown,having been a member of the Committee sinceSeptember 2013.The Audit Committee is made upsolely of independent non-executive directors.The Committee provides a
129、forum for reporting by theGroups auditor and reviews the Groups budget andits interim and fnal fnancial statements before theirsubmission to the Board.The Committee alsomonitors the Groups risk management and internalcontrol practices and reports to the Board on these.TheCommitteeadvisestheBoardonth
130、eappointment of the external auditor and on itsremuneration,both for audit and non-audit work.It also discusses the nature and scope of the auditwith the auditor.The Audit Committee has sole responsibility forassessing the independence of the external auditor,BDO LLP.Each year,the Committee seeks re
131、assurancethat the external auditor and its staff have no family,fnancial,employment,investment or businessrelationship with the Group.The Committee requiresthe external auditor and its associates to confrm thisin writing,and detail the procedures which theauditor has carried out in order to make thi
132、sconfrmation.The Committee also ensures that allpartners engaged in the audit process are rotated atleast every fve years,and assesses the likely impacton the auditors independence and objectivity beforeawarding it any contract for additional services.It is Group policy to require Audit Committeeapp
133、roval for all non-audit services provided by theindependent auditor.The consideration of auditor independence is astanding agenda item at each Audit Committeemeeting.Remuneration CommitteeThe members of the Remuneration Committee areJamesEde-Golightly(Chairman)andMichaelHiggins.TheRemunerationCommit
134、teesresponsibilities include the following:reviewingandapproving,ormakingrecommendations to the Board with respectto,the compensation of the executivedirectors and senior management;overseeinganevaluationofseniormanagement;andoverseeing and administering the Companysemployee share option scheme and
135、equityincentive plans in operation from time to time.The Remuneration Committee report is set out onpages 20 to 26.Board committeesPlant Health Care plc16Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 16Plant Health Care plc has taken note of the UKCorporate Go
136、vernance Code(“the UK Code”)published in September 2014.The UK Codeand associated guidance can be found on theFinancialReportingCouncilwebsiteatwww.frc.org.uk/corporate/ukcgcode.cfm.The rulesof the London Stock Exchange do not requirecompanies that have securities traded on AIM toformally comply wit
137、h the UK Code and the Companydoes not seek to formally comply nor give astatement of compliance.However,the Board isaccountable to the Companys shareholders for goodgovernance and has sought to apply those principlesof corporate governance commensurate with theCompanys size.The Companys approach is
138、set out below:Board compositionTheBoardcurrentlycomprisesanexecutiveChairman,two executive directors and three non-executive directors.The Board considers all of thenon-executives to be independent in judgmentand character.Biographies of the Board members appear on pages14 and 15.These indicate the
139、high levels and rangeof business experience which is essential to overseeeffectively a business of the size,complexity andgeographical spread of the Group.Concerns relatingto the executive management of the Group or theperformance of the directors can be raised inconfdence by contacting the senior i
140、ndependentdirector,Michael Higgins,through the CompanySecretary.Board committeesThe Board has established audit and remunerationcommittees,as described on page 16.No separatenominations committee has been established.A Nominations Working Group comprised of non-executive directors provides advice an
141、d guidance onthe selection of candidates;the full Board acts as anominations committee when changes to the Boardof directors are proposed.Workings of the BoardThe Board meets on a pre-scheduled basis at least sixtimes each year and more frequently when required.The Board has a schedule of matters re
142、served to it fordecision and the requirement for Board approval onthese matters is communicated widely throughoutthe senior management of the Group.The scheduleincludes matters such as:approval of the Groupsstrategic plan;extension of the Groups activities intonew business or geographic areas;any de
143、cision tocease to operate all or any material part of the Groupsbusiness;changes relating to the Groups capitalstructure;contracts that are material strategically orby reason of size;investments,including theacquisition or disposal of interests in the votingshares of any company or the making of any
144、 takeoveroffer;and the prosecution,defence or settlement oflitigation material to the Group.There is an agreed procedure for directors to takeindependent professional advice,if necessary,at theCompanys expense.This is in addition to the accesswhich every director has to the Company Secretary,who is
145、charged by the Board with ensuring that Boardprocedures are followed.The differing roles of Chairman and Chief Executiveare acknowledged.The key functions of the Chairmanare to conduct Board meetings and meetings ofshareholders and to ensure that all directors areproperly briefed in order to take a
146、full and constructivepart in Board discussions.The Chief Executive isrequired to develop and execute business strategiesand processes to enable the Groups business to meetthe requirements of its shareholders.The seniorindependent director acts as a point of contact forshareholders and other stakehol
147、ders with concernswhich have failed to be resolved,or would not beCorporate governancePlant Health Care plc17Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 17appropriate to be addressed,through the normalchannels of the Chairman or Chief Executive.Thesenior ind
148、ependent director also meets with the othermembers of the Board without the Chairman presenton at least an annual basis in order to evaluate andappraise the performance of the Chairman.To enable the Board to function effectively and allowdirectors to discharge their responsibilities,full andtimely a
149、ccess is given to all relevant information.Inthe case of Board meetings,this consists of acomprehensive set of papers,including regularbusiness progress reports and discussion documentsregarding specifc matters.All Board members engageactively with management to provide support in theirareas of spec
150、ifc competence;this provides ampleopportunity for non-executive directors to understandthe business in depth.In line with the requirements of the UK Code,the Board normally conducts an internal Boardperformance evaluation on an annual basis.Re-election of directorsAny director appointed during the y
151、ear is requiredunder the provisions of the Companys articles ofassociation to retire and seek election by shareholdersat the next annual general meeting.The articles alsorequire that one-third of the directors retire by rotationeach year and seek re-election at the annual generalmeeting.The director
152、s required to retire will be thosein offce longest since their previous re-election.In any event,each director must retire at the thirdannual general meeting following his appointment orre-appointment in a general meeting.Retiringdirectors are eligible for re-election by shareholders.Remuneration of
153、 directorsA statement of the Companys remuneration policyand full details of directors remuneration are set outin the Remuneration Committee report on pages20 to 26.Executive directors abstain from anydiscussion or voting at full Board meetings onRemuneration Committee recommendations wherethe recom
154、mendations have a direct bearing on theirown remuneration package.CommunicationThe Company places a great deal of importance oncommunication with its shareholders.The Companypublishes online both an interim statement and itsfull-year report and accounts.The annual report ismailed to all shareholders
155、 and,upon request,to otherparties who have an interest in the Groupsperformance.Regularcommunicationwithshareholders also takes place via the Companyswebsite: is regular dialogue with major shareholders,as well as general presentations after the releaseof the interim and fnal results.From time totim
156、e,these meetings involve the Chairman ornon-executive directors.All shareholders have theopportunity to ask questions at the Companysannual general meeting.Corporate governancecontinuedPlant Health Care plc18Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 18Risk
157、 management and internal controlsThe directors recognise that the Group is ambitiousand seeking signifcant growth.The Board has in place a formal process foridentifying,evaluating and managing the signifcantrisks faced by the Group,which complies with theRevised Guidance for Directors on the Combine
158、dCode published by the Financial Reporting Council.The directors are responsible for the Groups systemof internal control and for reviewing its effectiveness.However,such a system can provide only reasonable,but not absolute,assurance against materialmisstatement or loss.There is a formal process in
159、 place to regularly reviewthe control systems across the Group to evaluatewhether they are designed appropriately to mitigateemerging risks and in anticipation of expectedgrowth.Twice a year,the Chief Financial Offcerpresents to the Board,for discussion and approval,asummary of the key internal cont
160、rols in place duringthe prior period and proposals for enhancements tothese controls in the forthcoming period.Based onthis process,the directors believe that the Group hasinternal control systems in place appropriate to itssize and nature.Corporate governancecontinuedPlant Health Care plc19Annual R
161、eport and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 19The Remuneration Committee is chaired by James Ede-Golightly.Michael Higgins is also a member.Both arenon-executive directors.The Committee is responsible for determining the contract terms,remuneration andother benefts
162、of the executive directors and of the Chairman,and for monitoring the remuneration offrst-line executive management.The Committee may call on outside compensation experts as required.Remuneration policyIt is Group policy to set directors remuneration levels to attract,incentivise and retain the qual
163、ity of individualsthat the Group requires to succeed in its chosen objectives.It is also Group policy to ensure that there is astrong link between the level of executive directors remuneration and the performance of the Group inachieving its goals.Elements of remuneration executive directorsChief Ex
164、ecutive OffcerThe following comprised the principal elements of the Groups Chief Executive Offcers remuneration during2014 and 2015:basic salary and benefts;annual bonus(performance-related and discretionary);long-term share-based incentives;andpension contributions.Other executive directorsRemunera
165、tion for the Groups other executive directors during 2014 and 2015 was comprised of basic salaryand benefts.Basic salary and beneftsSalaries for the Chief Executive Offcer and other executive directors are reviewed annually by the Committee.As the level of the Chief Executive Offcers remuneration ca
166、n be signifcantly augmented through performance-related bonuses,only in exceptional circumstances will the Committee consider an increase in excess of thegeneral rate of wage infation for the United States.Where such an increase has been awarded,the Committeewill publish the reasons behind its decis
167、ion in the Remuneration Committee report.In addition to basic salary,the Groups Chief Executive Offcer was entitled to the following main benefts:three weeks of vacation per annum;coverage under the Companys health insurance plans;andcoverage under the Companys long-term and short-term disability an
168、d group term life insurance plans.20Remuneration Committee reportPlant Health Care plcAnnual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 20Annual bonusAn annual bonus is payable to the Chief Executive Offcer based on achievement of certain corporate andpersonal obj
169、ectives.For 2015,the Groups Chief Executive Offcer had a bonus potential of 100%of his basicsalary and he was paid a bonus of$125,000,or 50%of his basic salary.For 2016,the potential remains 100%.This ensures that there is a signifcant element of“at risk”pay,which is only available when good results
170、are achieved.Long-term share-based incentivesEach of the executive directors was eligible to participate in the Companys share option schemes andlong-term incentive stock award plans.The main features of these plans are:(a)2004 Unapproved share option schemeIn July 2004,the Board adopted the Plant H
171、ealth Care plc Unapproved Share Option Scheme 2004.Under thisscheme,the Board could grant options at an exercise price of not less than the market value of a share on thedate of award.Options may normally be exercised between three and 10 years from grant.In most cases,vesting is also dependent upon
172、 the option holder remaining an eligible employee.In 2014,the scheme reachedthe tenth anniversary of its approval by shareholders;no further options may be granted.The Company wasauthorised to award options and shares under these plans up to the greater of 3%of its issued share capitalor such number
173、 as,when aggregated with any outstanding options converted from the Plant Health Care,Inc.option plans from 1996 and 2001,amounts to no more than 10%of the issued share capital ofthe Company.(b)Value creation planOn 2 July 2013,the Company adopted the Plant Health Care plc 2013 Equity Incentive Plan
174、,or the ValueCreation Plan.Participants(which include the Executive Chairman,Chief Executive Offcer and key membersof the Groups senior management team)are entitled to receive a share of the Executive Total Incentive Poolestablished by the plan.The Executive Total Incentive Pool equals up to 10%of t
175、he Equity Value Created.EquityValue Created is defned as the value generated for shareholders in excess of the initial market value of theordinary shares increased by an 8%annual hurdle,over a four-year Performance Period.The initial marketvalue was 78p(corresponding to the price of the ordinary sha
176、res issued in the April 2013 private placement).The Performance Period extends from 16 April 2013 to the Measurement Date(the 20th market trading dayafter announcement of the Groups fnancial results for the year ending 31 December 2016 or such shorterperiod in the event of certain changes of control
177、).The mechanics of the plan accommodate equity issuances,including option awards and ordinary shares issued in new placements or as consideration for acquisitions(byadjusting the Executive Total Incentive Pool by up to 10%of any value generated from additional fundraisingsin excess of the issue pric
178、e of those fundraisings increased by an annual hurdle of 8%(multiplied by thenumber of shares issued in the additional fundraising)from the date of the fundraising up to the MeasurementDate)and the payment of dividends during the Performance Period.The vesting of awards under this plan isgenerally s
179、ubject to exercise conditions.The Company may not award options that amount to more than 10%of the issued share capital of the Company.Remuneration Committee reportcontinuedPlant Health Care plc21Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 21(c)2015 Employee
180、 share option planOn 16 June 2015,the Board adopted the Plant Health Care plc 2015 Employee Share Option Plan,or the EMIPlan,which provides for the grant of options to acquire the Companys ordinary shares.Under the EMI Plan,the Company may grant enterprise management incentive options,known as EMI o
181、ptions,to eligible bona fdeemployees who qualify under applicable United Kingdom tax law,as well as options that do not qualify as EMIoptions,or NQOs.Vesting of options is subject to the performance conditions set out in the applicable optionagreement and pursuant to the EMI Plan.The Board has the d
182、iscretion and authority to set and measure thesatisfaction of the performance conditions,which under the EMI Plan must be linked to the achievement ofchallenging fnancial performance over a period of at least three years,but no more than 10 years,from thedate of grant and the enhancement of sharehol
183、der value.Performance conditions may be amended,relaxedor waived by the Board provided that any varied performance conditions would be a fairer measure ofperformance than the original performance conditions and are no more or no less diffcult to satisfy than priorto the amendment.At any time,the tot
184、al market value of the shares that can be acquired upon the exerciseof all EMI options under the EMI Plan may not exceed 3 million.As part of the EMI Plan,the Board has adopted rules governing options awarded to the Companys USemployees,or the US Sub-Plan to the EMI Plan.The US Sub-Plan to the EMI P
185、lan provides for grants of bothincentive stock options qualifying under section 422 of the Internal Revenue Code of 1986,as amended,andnon-statutory stock options.The term of an incentive stock option may not exceed 10 years(subject to certainlimitations with respect to any employee who owns more th
186、an 10%of the voting power of all classes of theCompanys outstanding ordinary shares).In the event the option holder ceases to be an employee before heor she exercises the vested portion of the option for any reason other than death,disability or by the employerfor cause,the option shall expire three
187、 months after the date on which the option holder ceases to be anemployee.In the event the option holder ceases to be an employee because of death or disability,the optionholder,or his or her personal representative in the event of death,may exercise the vested portion of theoption during the 12-mon
188、th period following the date the option holder ceases to be an employee.In theevent that the option holders employment is terminated for cause by the employer,the option will expireimmediately upon the date employment is terminated.On 16 June 2015,the Board also adopted the Plant Health Care plc 201
189、5 Non-Employee Share Option Plan,or the Non-Employee Option Plan,that provides for the grant of options to acquire ordinary shares to eligibleoption holders who are not employees.As part of the Non-Employee Option Plan,the Board has adopted rulesgoverning options awarded to individuals who are not e
190、mployees,or the US Sub-Plan to the Non-EmployeeOption Plan.This sub-plan provides for grants of non-statutory stock options.As of 31 December 2015,noawards were outstanding under the Non-Employee Option Plan or the US Sub-Plan to the Non-EmployeeOption Plan.(d)Options granted outside option schemesT
191、he Company has granted options to acquire shares pursuant to separate unapproved option agreements toMessrs.Schmidt,Higgins and Lewis and to Dr.Webb.Generally,the options may only be exercised while theoption holder is a service provider to the Company.In the event that the option holder ceases to b
192、e a serviceprovider as a result of injury,ill health or disability,upon the company for which the option holder worksceasing to be a member of the Group,or the transfer of the business that employs the option holder to a22Remuneration Committee reportcontinuedPlant Health Care plcAnnual Report and A
193、ccounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 22person that is not in the Group,the option may be exercised during the six-month period beginning on thedate upon which the option holder is no longer a service provider to the Company.Shares allotted under theseoptions rank equall
194、y with all other shares in the same class in issue at the date of allotment.If and for so longas the allotted shares are listed or traded on any stock exchange,the Company shall apply for the sharesallotted under these options to be admitted to the relevant exchange.In the event of any capitalisatio
195、n issue,rights issue,consolidation,sub-division,reduction or other variation of the Companys share capital,thenumber and description of the shares subject to each option or the exercise price of each option shall be variedas the Board determines,provided that it considers such adjustment to be fair
196、and appropriate.Limitations applyto the extent to which any such adjustment may reduce the price at which shares may be purchased pursuantto the exercise of an option and the exercise price for a share to be newly issued on the exercise of an optionshall not be reduced below its nominal value.Pensio
197、n beneftThe Chief Executive Offcer is entitled to participate in the Plant Health Care,Inc.401(k)Plan.This is a defnedcontribution plan approved by the US Internal Revenue Service.The main features of the plan are:participation is open to all US-based employees who have completed a probationary peri
198、od afterinitial employment;employees may contribute a percentage of salary to the plan through a payroll withholding scheme;In 2015,the Group made matching contributions of up to 2%of compensation to participatingemployees.In 2016,the Group will continue to match contributions up to 2%of compensatio
199、n toparticipating employees;Beginning in 2014,Group contributions vest immediately;andthe plan is subject to various statutory non-discrimination tests to ensure that it does not favourhighly-compensated employees.Elements of remuneration non-executive directorsDuring 2014 and 2015,the remuneration
200、for non-executive directors consisted solely of fees for their servicesin connection with the Board and Board committees.The non-executive directors receive their fees wholly incash.In addition,certain of the non-executive directors provide consultancy services to the Group.Service contractsDuring 2
201、014 and 2015,the Company had service contracts with all executive and non-executive directors.Provisions in the service contracts included:For the Groups Chief Executive Offcer:employment continues through 2 April 2016 and is automatically extended at that time(and oneach 2 April thereafter)for succ
202、essive one-year periods unless either party provides 60 days priorwritten notice;Remuneration Committee reportcontinuedPlant Health Care plc23Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 23the employment agreement can be terminated by either party without cau
203、se,provided that Mr.Schmidtis required to provide six months prior written notice;the Company may also terminate Mr.Schmidts employment with immediate effect for cause on the partof Mr.Schmidt;Mr.Schmidt may terminate his employment for good reason;however,he must provide 20 days priorwritten notice
204、 and the opportunity to correct the event giving rise to such termination;if Mr.Schmidts employment is terminated by the Company for any reason other than for cause or byMr.Schmidt for good reason,Mr.Schmidt is eligible to receive an amount equal to 12 months of hisbase pay plus a bonus;andIn the ev
205、ent of a sale of all of the Companys assets and/or equity,Mr.Schmidt is entitled to be paid(in a lump sum within 60 days of the effective date of such sale)an amount equal to(i)0.33%of thenet proceeds(up to 1,000,000),if such sale generates at least 150,000,000 in net proceeds or(ii)anamount equal t
206、o$1,500,000 if the effective date of such sale occurs prior to 2 April 2016 and the salegenerates less than 150,000,000 in gross proceeds.For other executive directors(including the Executive Chairman):termination may be initiated by the Company or the director at any time with three months writtenn
207、otice;the Company may also terminate the agreement with immediate effect by paying a sum in lieu of noticeequal to the basic fxed salary the director would have been entitled to receive during the notice period;andthe Company may also terminate the agreement with immediate effect at any time without
208、 notice orpayment in lieu of notice for certain circumstances including gross misconduct affecting the business.For non-executive directors:each directors appointment may be terminated with no less than three months prior written notice;andeach directors appointment may also be terminated with immed
209、iate effect for certain circumstancesincluding serious breach or repeated breach of any obligations to the Company;any act of fraud ordishonesty;or a declaration of bankruptcy.In addition to the above,the Companys articles of association require that at least one-third of the directorsretire by rota
210、tion at each annual general meeting.Such retiring directors are eligible for re-election.24Remuneration Committee reportcontinuedPlant Health Care plcAnnual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 24Directors remunerationFor the year ended 31 December 2015,the
211、table below sets forth the compensation paid to the directors and,in the case of Mr.Schmidt,refects the compensation paid for his services as Chief Executive Offcer.Mr.Schmidt did not receive any compensation other than in his capacity as an executive.Performance-ShareBase salary,relatedOtheroptionT
212、otalTotaland feesbonusbeneftsbeneft20152014$000$000$000$000$000$000Executive:P.Schmidt25012527402479C.Richards*13734147887R.Webb*12251263491Non-executive:M.Higgins686874J.Ede-Golightly383841W.Lewis(Appointed 1 April 2015)294978644125279021,698772*The 2015 amount included in the table for Chris Richa
213、rds represents fees for services provided as a non-executive and executive director in theamount of$22,074 and$115,361,respectively.*The 2015 amount included in the table for Richard Webb represents fees for services provided as a non-executive and executive director in theamount of$23,737 and$98,19
214、1,respectively.The 2014 amount included in the table for Richard Webb represents fees for services provided as a non-executive director in the amount of$41,000,as well as remuneration for consultancy services in the amount of$50,000.Executive salariesAt 31 December 2015,Paul Schmidt had a base salar
215、y of$250,000(2014:$250,000)and bonus potentialof 100%.Other beneftsIn 2015,the Company contributed to the 401(k)Plan 2%(2014:2%)of eligible compensation.In 2015,pension expense for the executive directors was$5,850(2014:$5,350).In 2015,the Company incurred nil(2014:$17,550)of other payroll expense.I
216、n 2015,the Company incurred$21,157(2014:$18,666)of medical,dental and life insurance expense.The share option beneft includes the amounts for the value of options and other equity awards granted to theCompanys directors during 2015.Remuneration Committee reportcontinuedPlant Health Care plc25Annual
217、Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 25Directors share-based incentivesMovements in 2015During 2015,the following share option awards were made to directors:Date ofNumber ofExerciseDirectorPlanawardoptionsprice Expiry dateC.Richards2015 Employee16 June 20152
218、33,6441.0716 June 2019share option planEMI Options481,356 NQOsR.Webb2015 Employee16 June 2015233,6441.0716 June 2019share option planEMI options841,356 NQOsW.LewisStand-alone agreement16 April 201589,6861.1216 April 2019Other informationDuring the year,the Companys share price on AIM ranged between
219、72.0p and 127.5p.At 31 December 2015,the share price was 83.5p.At 7 April 2016,the last working day prior to the approval of this annual report,the share price was 52.5p.26Remuneration Committee reportcontinuedPlant Health Care plcAnnual Report and Accounts 201518966 Plant Health Care AR:Layout 115/
220、04/201616:37Page 26The directors present their annual report together with the audited fnancial statements for the year ended31 December 2015.See note 19 for discussion of fnancial risk management objectives and policies,exposureto price,credit,liquidity and cash fow risk.Results and dividendsThe re
221、sults of the Group for the year are set out on page 32 and show a loss for the year of$7,720,000(2014:loss of$6,130,000).The directors recommend that no dividend be paid at this time.DirectorsThe directors of the Company during and at the end of the year and their benefcial interests in the ordinary
222、share capital of the Company and options to purchase ordinary shares of the Company(including through thevalue creation plan)were as follows:At 31 December 2015SharesOptionsC.Richards76,3241,577,000P.Schmidt82,8801,909,821R.Webb10,0001,203,205M.Higgins117,647J.Ede-Golightly445,111W.Lewis89,686Furthe
223、r details of the directors share options and awards under the VCP are shown in the RemunerationCommittee report on pages 20 to 26.None of the directors has any holding in any subsidiary company,nor any material interest in the transactionsof the Group.Substantial shareholdersOn 7 April 2016,the dire
224、ctors are aware of the following persons who,directly or indirectly,are interested in3%or more of the Companys existing Ordinary Share capital:Percentage of issuedNameShares heldshare capital*Henderson Global Investors Limited18,957,12426.38Richard Griffths*14,886,13220.72Blake Holdings Limited*9,45
225、3,75813.16Boulder River Capital Corporation and its affliates7,955,39711.08Polar Capital4,422,1546.15Sarossa Plc3,837,3045.34Seren Capital Management Limited*3,724,6195.18*The percentages shown are based on the most recent share register analysis or notifcation.*Blake Holdings Limited and Seren Capi
226、tal Management Limited are controlled by Richard Griffths,hence the interest of Blake Holdings Limitedand Seren Capital Management Limited are also included within that of Richard Griffths.Report of the directorsPlant Health Care plc27Annual Report and Accounts 201518966 Plant Health Care AR:Layout
227、115/04/201616:37Page 27Research and developmentThe Group continues to invest in R&D activities with an emphasis on the improvement of existing technologies,the formulation of products to meet specifc customer needs and the development of proprietary bio-stimulantsbased on the Companys Harpin platfor
228、m technology.For further details of the Companys R&D activities,seethe Chairmans letter and Strategic report on pages 3 to 13.Business reviewFor a discussion of the Groups 2015 performance and future developments,see the Chairmans letter andStrategic report on pages 3 to 13.Board meetings and attend
229、anceThe following table shows the attendance of directors at meetings of the Board,Audit Committee andRemuneration Committee held during the 2015 fnancial year:AuditRemunerationBoardCommitteeCommitteeNumber of meetings held934C.Richards92P.Schmidt9R.Webb91M.Higgins934J.Ede-Golightly934W.Lewis(Appoin
230、ted 1 April 2015)51AuditorAll of the directors have taken all the steps that they ought to have taken to make themselves aware of anyinformationneededbytheCompanysauditorforthepurposesofitsauditandtoensurethattheauditorisawareofthatinformation.Thedirectorsarenotawareofanyrelevantauditinformationofwh
231、ichtheauditorisunaware.Going concernIn consideration of the Groups current resources and review of fnancial forecasts and projections,the directorshave a reasonable expectation that the Group has adequate resources to continue in operational existence forthe foreseeable future.No material uncertaint
232、ies that may cast signifcant doubt about the ability of theCompany to continue as a going concern have been identifed by the directors.Accordingly,the directorscontinue to adopt the going concern basis in preparing the annual report and accounts.Annual general meetingAt the forthcoming annual genera
233、l meeting of the Company,resolutions will be put forward to re-electMichael Higgins and Paul Schmidt as directors and to re-appoint BDO LLP as the auditor of the Company.Shareholders will also be asked to approve the US Sub-Plan to the 2015 Employee Share Option Plan.By Order of the BoardAndrew C.Wo
234、od FCISCompany Secretary8 April 201628Report of the directorscontinuedPlant Health Care plcAnnual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 28The directors are responsible for preparing the annual report and the fnancial statements in accordance withapplicable la
235、w and regulations.Company law requires the directors to prepare fnancial statements for each fnancial year.Under that law,thedirectors have elected to prepare the Group fnancial statements in accordance with International FinancialReporting Standards(“IFRSs”),as adopted by the European Union,and the
236、 Company fnancial statements inaccordance with United Kingdom Generally Accepted Accounting Practice(United Kingdom AccountingStandards and applicable law).Under company law,the directors must not approve the fnancial statementsunless they are satisfed that they give a true and fair view of the stat
237、e of affairs of the Group and Companyand of the proft or loss of the Group for that period.The directors are also required to prepare fnancialstatements in accordance with the rules of the London Stock Exchange for companies trading securitieson AIM.In preparing these fnancial statements,the directo
238、rs are required to:select suitable accounting policies and then apply them consistently;make judgments and accounting estimates that are reasonable and prudent;state whether they have been prepared in accordance with IFRSs,as adopted by the European Union,subject to any material departures disclosed
239、 and explained in the fnancial statements;andprepare the fnancial statements on the going concern basis,unless it is inappropriate to presume thatthe Company will continue in business.The directors are responsible for keeping adequate accounting records that are suffcient to show and explainthe Comp
240、anys transactions and disclose with reasonable accuracy the fnancial position of the Company andenable them to ensure that the fnancial statements comply with the requirements of the Companies Act2006.They are also responsible for safeguarding the assets of the Company and hence for taking reasonabl
241、esteps for the prevention and detection of fraud and other irregularities.Website publicationThe directors are responsible for ensuring the annual report and the fnancial statements are made availableon a website.Financial statements are published on the Companys website in accordance with legislati
242、on inthe United Kingdom governing the preparation and dissemination of fnancial statements,which may vary fromlegislation in other jurisdictions.The maintenance and integrity of the Companys website is the responsibilityof the directors.The directors responsibility also extends to the ongoing integr
243、ity of the fnancial statementscontained therein.Statement of directors responsibilitiesPlant Health Care plc29Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 29We have audited the fnancial statements of Plant Health Care plc for the year ended 31 December 2015 w
244、hichcomprise the consolidated statement of comprehensive income,the consolidated statement of fnancialposition,the consolidated statement of changes in equity,the consolidated statement of cash fows,theCompany statement of fnancial position,Company statement of changes in equity,and the related note
245、s.Thefnancial reporting framework that has been applied in the preparation of the Group fnancial statements isapplicable law and International Financial Reporting Standards(IFRSs)as adopted by the European Union.Thefnancial reporting framework that has been applied in the preparation of the parent c
246、ompany fnancialstatements is applicable law and United Kingdom Accounting Standards(United Kingdom Generally AcceptedAccounting Practice).This report is made solely to the Companys members,as a body,in accordance with Chapter 3 of Part 16 ofthe Companies Act 2006.Our audit work has been undertaken s
247、o that we might state to the Companysmembers those matters we are required to state to them in an auditors report and for no other purpose.Tothe fullest extent permitted by law,we do not accept or assume responsibility to anyone other than theCompany and the Companys members as a body,for our audit
248、work,for this report,or for the opinions wehave formed.Respective responsibilities of directors and auditorAs explained more fully in the statement of directors responsibilities,the directors are responsible for thepreparation of the fnancial statements and for being satisfed that they give a true a
249、nd fair view.Ourresponsibility is to audit and express an opinion on the fnancial statements in accordance with applicable lawand International Standards on Auditing(UK and Ireland).Those standards require us to comply with theFinancial Reporting Councils(FRCs)Ethical Standards for Auditors.Scope of
250、 the audit of the fnancial statementsA description of the scope of an audit of fnancial statements is provided on the FRCs website atwww.frc.org.uk/auditscopeukprivate.Opinion on fnancial statementsIn our opinion:the fnancial statements give a true and fair view of the state of the Groups and the pa
251、rent companysaffairs as at 31 December 2015 and of the Groups loss for the year then ended;the Group fnancial statements have been properly prepared in accordance with IFRSs as adopted by theEuropean Union;the parent companys fnancial statements have been properly prepared in accordance with UnitedK
252、ingdom Generally Accepted Accounting Practice;andthe fnancial statements have been prepared in accordance with the requirements of the CompaniesAct 2006.30Independent auditors reportTo the members of Plant Health Care plcPlant Health Care plcAnnual Report and Accounts 201518966 Plant Health Care AR:
253、Layout 115/04/201616:37Page 30Opinion on other matters prescribed by the Companies Act 2006In our opinion the information given in the strategic report and directors report for the fnancial year for whichthe fnancial statements are prepared is consistent with the fnancial statements.Matters on which
254、 we are required to report by exceptionWe have nothing to report in respect of the following matters where the Companies Act 2006 requires us toreport to you if,in our opinion:adequate accounting records have not been kept by the parent company,or returns adequate for ouraudit have not been received
255、 from branches not visited by us;orthe parent company fnancial statements are not in agreement with the accounting records and returns;orcertain disclosures of directors remuneration specifed by law are not made;orwe have not received all the information and explanations we require for our audit.Jul
256、ian Frost(Senior statutory auditor)For and on behalf of BDO LLPStatutory auditor55 Baker Street,LondonUnited Kingdom8 April 2016BDO LLP is a limited liability partnership registered in England and Wales(with registered number OC305127).Independent auditors reportcontinuedPlant Health Care plc31Annua
257、l Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 3120152014Note$000$000Revenue47,5086,880Cost of sales(2,825)(3,379)Gross proft4,6833,501Research and development expenses(4,105)(2,044)Business development expenses(1,155)(1,037)Sales and marketing expenses(2,715)(2,731
258、)Administrative expenses(4,484)(3,766)Operating loss5(7,776)(6,077)Finance income1095119Finance expense10(2)(3)Loss before tax(7,683)(5,961)Income tax expense11(37)(169)Loss for the year attributable to the equity holders of theparent company(7,720)(6,130)Other comprehensive income:Items which will
259、or may be reclassifed to proft or loss:Exchange difference on translation of foreign operations111(29)Total comprehensive loss for the year attributable to theequity holders of the parent company(7,609)(6,159)Basic and diluted loss per share12$(0.11)$(0.09)32Consolidated statement of comprehensive i
260、ncomefor the year ended 31 December 2015Plant Health Care plcAnnual Report and Accounts 2015The notes on pages 36 to 71 form part of these consolidated fnancial statements.18966 Plant Health Care AR:Layout 115/04/201616:37Page 3220152014Note$000$000AssetsNon-current assetsIntangible assets132,4352,7
261、07Property,plant and equipment141,183298Trade and other receivables167341Total non-current assets3,6913,046Current assetsInventories151,3911,084Trade and other receivables164,6092,710Investments197,49112,775Cash and cash equivalents9483,898Total current assets14,43920,467Total assets18,13023,513Liab
262、ilitiesCurrent liabilitiesTrade and other payables173,0611,832Finance leases18810Total current liabilities3,0691,842Non-current liabilitiesFinance leases181624Total non-current liabilities1624Total liabilities3,0851,866Total net assets15,04521,647Share capital211,2361,234Share premium2271,04070,895F
263、oreign exchange reserve22(500)(611)Accumulated defcit22(56,731)(49,871)Total equity15,04521,647The consolidated fnancial statements were approved and authorised for issue by the Board on 8 April 2016.P.SchmidtDirectorRegistered No:05116780(England and Wales)Consolidated statement of financial positi
264、onat 31 December 2015Plant Health Care plc33Annual Report and Accounts 2015The notes on pages 36 to 71 form part of these consolidated fnancial statements.18966 Plant Health Care AR:Layout 115/04/201616:37Page 33ReverseShare-basedForeignShareShareacquisitionpaymentexchangeAccumulatedcapitalpremiumre
265、servereservereservedefcitTotal$000$000$000$000$000$000$000Balance at 1 January 20141,21570,20610,5482,556(582)(57,348)26,595Loss for year(6,130)(6,130)Exchange difference arising ontranslation of foreign operations(29)(29)Total comprehensive income/(loss)(29)(6,130)(6,159)Reverse acquisition reserve
266、reclassifcation(10,548)10,548Share-based payments reclassifcation(2,556)2,556Share-based payments503503Options exercised19689708Balance at 31 December 20141,23470,895(611)(49,871)21,647Loss for year(7,720)(7,720)Exchange difference arising ontranslation of foreign operations111111Total comprehensive
267、 income/(loss)111(7,720)(7,609)Shares issued4242Share-based payments860860Options exercised2103105Balance at 31 December 20151,23671,040(500)(56,731)15,04534Consolidated statement of changes in equityfor the year ended 31 December 2015Plant Health Care plcAnnual Report and Accounts 2015The notes on
268、pages 36 to 71 form part of these consolidated fnancial statements.18966 Plant Health Care AR:Layout 115/04/201616:37Page 3420152014Note$000$000Cash fows from operating activitiesLoss for the year(7,720)(6,130)Adjustments for:Depreciation1416487Amortisation of intangibles13272297Share-based payment
269、expense860503Finance income10(95)(119)Finance expense1023Income taxes expense37169(Increase)/decrease in trade and other receivables(1,931)735Loss on disposal of fxed assets145(Increase)/decrease in inventories(307)1,426Increase/(decrease)in trade and other payables1,229(1,334)Income taxes paid(37)(
270、190)Net cash used in operating activities(7,512)(4,548)Investing activitiesPurchase of property,plant and equipment14(1,063)(114)Finance income1095119Purchase of investments(8,933)(20,831)Sale of investments14,21719,110Net cash provided by/(used in)investing activities4,316(1,716)Financing activitie
271、sFinance expense10(2)(3)Issue of ordinary share capital42Exercise of options105708Repayment of borrowings(10)(9)Net cash provided by fnancing activities135696Net decrease in cash and cash equivalents(3,061)(5,568)Effects of exchange rate changes on cash and cash equivalents111(29)Cash and cash equiv
272、alents at beginning of period3,8989,495Cash and cash equivalents at end of period9483,898Consolidated statement of cash flowsfor the year ended 31 December 2015Plant Health Care plc35Annual Report and Accounts 2015The notes on pages 36 to 71 form part of these consolidated fnancial statements.18966
273、Plant Health Care AR:Layout 115/04/201616:37Page 351.General informationPlant Health Care plc(the Company)is a public limited company incorporated in England and Wales.Theaddress of its registered offce is 48 Chancery Lane,London WC2A 1JF.The Company and its subsidiaries(together,the Group)is a lead
274、ing provider of proprietary agricultural biological products and technologysolutions focused on improving crop performance by activating a growth response and bolstering plant defencemechanisms against both abiotic and biotic stresses.The principal markets of the Company and its subsidiariesare desc
275、ribed in Note 9.2.Accounting policiesReporting currencyThe fnancial statements are presented in thousands of US dollars.The directors believe that it is appropriateto use US dollars as the presentational currency for reporting,since the majority of the Groups transactionsare conducted in that curren
276、cy.The exchange rates used to convert British pounds to US dollars at 31 December2015 and 2014 were 1.4802 and 1.5532,respectively,and the average exchange rate for the years then endedwere 1.5284 and 1.6476,respectively.Basis of preparationThese consolidated fnancial statements have been prepared i
277、n accordance with International FinancialReporting Standards,International Accounting Standards and Interpretations(collectively“IFRSs”)issued bythe International Accounting Standards Board(“IASB”)and as adopted by the European Union and thoseparts of the Companies Act 2006 which apply to companies
278、preparing their fnancial statements under IFRSs.Amounts are rounded to the nearest thousand,unless otherwise stated.In 2015,the Group changed its operating and reportable segments to align with the way its business is currentlymanaged and to better refect its evolving research and development activi
279、ties.Therefore,the Group nowdiscloses New Technology as a separate operating and reportable segment.The 2014 presentation of this datahas been reclassifed to conform to the 2015 presentation.Additional information about the Groups operatingand reportable segments is included in Note 9.Basis of measu
280、rementThe consolidated fnancial statements have been prepared on a historical cost basis,except for fnancialinstruments designated at fair value through the proft and loss.The principal accounting policies are set out below.The policies have been applied consistently to all theyears presented and on
281、 a going concern basis.36Notes forming part of the Group financial statementsfor the year ended 31 December 2015Plant Health Care plcAnnual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 362.Accounting policies continuedStandards,amendments and interpretations to publ
282、ished standards effective in 2015 adopted by the GroupA number of new and amended standards have become effective since the beginning of the year.None of thenew amendments materially affect the Group.Standards,amendments and interpretations to published standards not yet effectiveThere are a number
283、of new standards and amendments to and interpretations of existing standards which havebeen published and are not yet mandatory and which the Group has decided not to adopt early.A summary of these standards is given in Note 25 to the fnancial statements.Basis of consolidationOn 6 July 2004,Plant He
284、alth Care plc became the legal parent company of Plant Health Care,Inc.in a share-for-share transaction.The former shareholders of Plant Health Care,Inc.became the majority shareholders ofPlant Health Care plc.Further,the continuing operations and executive management of Plant Health Care plcwere th
285、ose of Plant Health Care,Inc.This combination was accounted for as a reverse acquisition with Plant Health Care,Inc.,the legal acquiree,being treated as the acquirer.Under this method,the assets and results of Plant Health Care plc were combinedwith the assets,liabilities and results of Plant Health
286、 Care,Inc.from the date of combination.There was noadjustment to the carrying values of the assets and liabilities in Plant Health Care,Inc.to refect their fair valueat the date of combination.No goodwill arose on this combination.These consolidated fnancial statements incorporate the fnancial state
287、ments of the Group and the entitiescontrolled by the Group.Control exists when the Group has(i)power over the investee,(ii)exposure,orrights,to variable returns from its involvement with the investee,and(iii)the ability to use its power over theinvestee to affect the amount of the investors returns.
288、The fnancial statements of subsidiaries are includedin the consolidated fnancial statements from the date that control commences until the date that controlceases.All signifcant intercompany transactions,balances,revenues and expenses have been eliminated.The consolidated fnancial statements incorpo
289、rate the results of business combinations using the purchasemethod.In the consolidated statement of fnancial position,the acquirees identifable assets,liabilities andcontingent liabilities are initially recognised at their fair values at the acquisition date.The results of acquiredoperations are inc
290、luded in the statement of comprehensive income from the date on which control is obtained.They are deconsolidated from the date control ceases.Notes forming part of the Group financial statementscontinuedfor the year ended 31 December 2015Plant Health Care plc37Annual Report and Accounts 201518966 P
291、lant Health Care AR:Layout 115/04/201616:37Page 372.Accounting policies continuedRevenueThe Group recognises revenue at the fair value of consideration received or receivable.Sales of goods toexternal customers are at invoiced amounts less value added tax or local tax on sales.The Group currentlygen
292、erates revenue solely within its Commercial business through the sale of its proprietary and third-partyproducts,as well as from granting certain licenses for the use of its intellectual property.Revenue from the saleof goods is recognised when all the following conditions have been satisfed:the sig
293、nifcant risks and rewards of ownership of the goods have been transferred to the buyer;the Group retains neither continuing managerial involvement to the degree usually associated withownership nor effective control over the goods sold;the amount of revenue can be measured reliably;it is probable th
294、at the economic benefts associated with the transaction will fow to the Group;andthe costs incurred or to be incurred in respect of the transaction can be measured reliably.The Group typically transfers signifcant risks of ownership and title in the products upon shipment of goodsfrom one of its loc
295、ations.After the Group transfers title and ships goods to the customer,it typically does notretain signifcant involvement nor does it have effective control over the goods sold.Therefore,if all otherrevenue recognition criteria are met,revenue is recognised upon shipment of the goods to the customer
296、.Payment terms range from 30 to 270 days depending on the local custom.In the limited situation where the Group offers a product rebate to the customer,it records the fair value ofthe product rebate as a reduction to product revenue.An accrued liability for these product rebates is estimatedand reco
297、rded at the time the revenues are recorded.License/milestone payment income is recognised when the Group has no remaining obligations to performunder a non-cancellable contract which permits the user to act freely under the terms of the agreement andthe collection of the resulting receivable is reas
298、onably assured.To date the Group has not achieved theperformance obligations for any milestone payments.GoodwillGoodwill is measured as the excess of the cost of an acquisition over the net fair value of the identifableassets,liabilities and contingent liabilities,plus any direct costs of acquisitio
299、n for acquisitions before 1 January2010.For business combinations completed on or after 1 January 2010,direct costs of acquisition arerecognised immediately as an expense.Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged toadministrative expenses in t
300、he consolidated statement of comprehensive income.The Company performsannual impairment tests for goodwill at the fnancial year-end.38Notes forming part of the Group financial statementscontinuedfor the year ended 31 December 2015Plant Health Care plcAnnual Report and Accounts 201518966 Plant Health
301、 Care AR:Layout 115/04/201616:37Page 382.Accounting policies continuedOther intangible assetsExternally-acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives.The amortisation expense is included within adminis
302、trative expensesin the consolidated statement of comprehensive income.Intangible assets are recognised on business combinations if they are separable from the acquired entity or giverise to contractual or other legal rights,and are initially recognised at their fair value.Expenditure on internally-d
303、eveloped intangible assets(development costs)are capitalised if it can bedemonstrated that:it is technically feasible to develop the product for it to be sold;adequate resources are available to complete the development;there is an intention to complete and sell the product;the Group is able to sell
304、 the product;sale of the product will generate future economic benefts;andexpenditure on the project can be measured reliably.Development expenditure not satisfying the above criteria and expenditure on the research phase of internalprojects are recognised in proft or loss.Capitalised development co
305、sts are amortised over the periods of the future economic beneft attributable tothe asset.The amortisation expense is included within administrative expenses in the consolidated statementof comprehensive income.The Group has not capitalised any development costs to date.The signifcant intangibles re
306、cognised by the Group and their estimated useful economic lives are as follows:Licenses 12 yearsRegistrations 5-10 yearsImpairment of goodwill and other intangible assetsImpairment tests on goodwill are undertaken annually at the fnancial year-end.Other non-fnancial assets aresubject to impairment t
307、ests whenever events or changes in circumstances indicate that their carrying amountmay not be recoverable.Where the carrying value of an asset exceeds its recoverable amount(that is thehigher of value in use and fair value less costs to sell),the asset is written down accordingly.Impairment charges
308、 are included within administrative expenses in the consolidated statement ofcomprehensive income.An impairment loss recognised for goodwill is not reversed.Notes forming part of the Group financial statementscontinuedfor the year ended 31 December 2015Plant Health Care plc39Annual Report and Accoun
309、ts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 392.Accounting policies continuedProvisionsProvisions are recognised for liabilities of uncertain timing or amount that have arisen as a result of pasttransactions and are discounted at a pre-tax rate refecting current market assessments
310、of the time value ofmoney and the risks specifc to the liability.Foreign currencyForeign currency transactions of individual companies are translated into the individual companys functionalcurrency.Any differences are recognised in proft or loss.On consolidation,the results of operations that have a
311、 functional currency other than US dollars are translatedinto US dollars at rates approximating to those ruling when the transactions took place.Statements of fnancialposition are translated at the rate ruling at the end of the fnancial period.Exchange differences arising ontranslating the opening n
312、et assets at opening rate and the results of operations that have a functional currencyother than US dollars at average rate are included within“other comprehensive income”in the consolidatedstatement of comprehensive income and taken to the foreign exchange reserve within capital and reserves.Opera
313、ting segmentsOperating segments are reported in a manner consistent with the internal reporting provided to the Groupschief operating decision maker(“CODM”).The CODM,who is responsible for allocating resources andassessing performance of the operating segments,has been identifed as the Chief Executi
314、ve Offcer.Financial instrumentsTrade receivables collectible within one year from the date of invoicing are recognised at invoice value lessprovision for amounts the collectibility of which is uncertain.Trade receivables collectible after more than oneyear from the date of invoicing are initially re
315、cognised at fair value,and subsequently carried at amortised costusing the effective interest rate method,less provision for impairment.Investments comprise short-term investments in notes and bonds having investment grade ratings.Investmentsare designated at fair value through proft and loss upon i
316、nitial recognition when they form part of a group offnancial assets which is actively managed and evaluated by key management personnel on a fair value basisin accordance with the Companys documented investment strategy that seeks to improve the rate of returnearned by the Company on its excess cash
317、 while providing unrestricted access to the funds.The Companysinvestments are carried at fair value as determined by quoted prices on active markets,with changes in fairvalues recognised through proft or loss.Cash and cash equivalents comprise cash on hand,demand deposits and other short-term highly
318、 liquidinvestments that are readily convertible to a known amount of cash and are subject to insignifcant risk ofchanges in value.40Notes forming part of the Group financial statementscontinuedfor the year ended 31 December 2015Plant Health Care plcAnnual Report and Accounts 201518966 Plant Health C
319、are AR:Layout 115/04/201616:37Page 402.Accounting policies continuedTrade and other payables are initially recognised at fair value and subsequently carried at amortised cost usingthe effective interest method.Equity instruments issued by the Company are recorded at the proceeds received,net of dire
320、ct issue costs.The Groups ordinary shares are classifed as equity instruments.Employee beneftsThe Group maintains a number of defned contribution pension schemes for certain of its employees;theGroup does not contribute to any defned beneft pension schemes.The amount charged to proft or lossrepresen
321、ts the employer contributions payable to the schemes for the fnancial period.The expected costs of all short-term employee benefts,including short-term compensated absences,arerecognised during the period the employee service is rendered.Equity share-based paymentsThe Group operates a number of equi
322、ty-settled,share-based payment plans,under which it receives servicesfrom employees and non-employees as consideration for the Companys equity instruments,in the form ofoptions or restricted stock units(awards).The fair value of the award is recognised as an expense,measuredas of the grant date usin
323、g a binomial option pricing model.The total amount to be expensed is determinedby reference to the fair value of instruments granted,excluding the impact of any service and non-marketperformance vesting conditions.Non-market vesting conditions are included in assumptions about the numberof options t
324、hat are expected to vest.The total expense is recognised over the vesting period,which is typicallythe period over which all of the specifed vesting conditions are to be met.Leased assets:lesseeWhere assets are fnanced by leasing agreements that give rights approximating to ownership(fnance leases),
325、the assets are treated as if they had been purchased outright.The amount capitalised is the lower of fair valueand present value of the minimum lease payments payable over the term of the lease.The corresponding leasecommitments are shown as amounts payable to the lessor.Depreciation on the relevant
326、 assets is recognisedin proft or loss over the shorter of useful economic life and lease term.Lease payments are analysed between capital and interest components.The interest element of the paymentis charged to income over the period of the lease and is calculated so that it represents a constant pr
327、oportionof the balances of capital repayments outstanding.The capital element reduces the amounts payable tothe lessor.All other leases are treated as operating leases.Their annual rentals are charged to income on a straight-linebasis over the lease term.Notes forming part of the Group financial sta
328、tementscontinuedfor the year ended 31 December 2015Plant Health Care plc41Annual Report and Accounts 201518966 Plant Health Care AR:Layout 115/04/201616:37Page 412.Accounting policies continuedProperty,plant and equipmentItems of property,plant and equipment are initially recognised at cost.Cost inc
329、ludes the purchase price andcosts directly attributable to bringing the asset into operation.Depreciation is provided to write off the cost,less estimated residual values,of all property,plant and equipment over their expected useful lives.It iscalculated at the following rates:Production machinery
330、10 20%per annumOffce equipment 20 33%per annumVehicles 20%per annumInventoriesInventories are initially recognised at cost,and subsequently at the lower of cost and net realisable value.Costis based upon a weighted average cost method.The Group compares the cost of inventory to its net realisableval
331、ue and writes down inventory to its net realisable value,if lower than its cost.Cost comprises all costs ofpurchase and all other costs of conversion.Net realisable value is the estimated selling price in the ordinarycourse of business,less applicable variable selling expenses.Deferred taxDeferred t
332、ax assets and liabilities are recognised where the carrying amount of an asset or liability in thestatement of fnancial position differs from its tax base,except for differences on:the initial recognition of goodwill;the initial recognition of an asset or liability in a transaction which is not a bu
333、siness combination andat the time of the transaction affects neither accounting nor taxable proft;andinvestments in subsidiaries and joint arrangements where the Group is able to control the timing of thereversal of the difference and it is probable that the difference will not reverse in the foreseeable future.Recognition of deferred tax assets is restricted to those instances where it is probabl
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